Class Action Claims State Farm Unlawfully Denied Coverage for Medical Expenses Ambiguously Deemed Not Reasonable

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A proposed class action lawsuit looks to challenge State Farm Mutual Automobile Insurance Company’s alleged practice of denying claimants payment for medical expenses due to the determination that the costs are not “reasonable.”

According to the 31-page lawsuit, State Farm “took advantage of ambiguous Policy terms” to deny medical payments coverage to insureds in Georgia and possibly other states by claiming its policies provide coverage only for “reasonable medical expenses.” The case claims the defendant has failed, however, to clearly define which medical expenses are excluded from coverage.

The plaintiff, a State Farm policyholder who sustained injuries in a motor vehicle collision in Fulton County, Georgia, argues that the term “reasonable medical expenses” is ambiguous and should therefore be interpreted strictly against State Farm and in favor of coverage for claimants.

Per the complaint, the plaintiff obtained chiropractic and physical therapy care following a May 2009 collision and filed a claim with State Farm for medical payments insurance coverage pursuant to the terms of her State Farm auto insurance policy. Although State Farm paid a portion of one doctor’s bill for chiropractic care, the insurer denied coverage for the remainder of the plaintiff’s medical costs—$89.00 of her first doctor’s bill, a $3,510.00 bill for chiropractic care and a $3,195.00 bill for physical therapy care—based on the determination that they were not “reasonable medical expenses” within the terms of her policy, the suit relays.

According to the complaint, State Farm indicates in its auto insurance policies that it will “pay reasonable medical expenses incurred for bodily injury caused by accident for services furnished within three years of the date of the accident. These expenses, per the suit, are for necessary medical, surgical, X-ray, dental, ambulance, hospital, professional nursing and funeral services, eyeglasses, hearing aids, and prosthetic devices.” Not included among the insurer’s “reasonable medical expenses,” the case says, are treatments, services, products or procedures that are “experimental in nature for research, or not primarily designed to serve a medical purpose;” “not commonly and customarily recognized throughout the medical profession and within the United States as appropriate for the treatment of the bodily injury;” or were incurred for “the use of thermography or other related procedures of a similar nature” or “the purchase or rental of equipment not primarily designed to serve a medical purpose.”

The plaintiff claims that while it is unclear what State Farm considers to be part of the aforementioned “ambiguous” categories, the expenses for which the woman seeks coverage are not specifically or unambiguously excluded from coverage under the policy’s terms.

The complaint notes that the plaintiff filed a civil suit against State Farm in Cobb County, Georgia state court in May 2012 to recover the cost of her medical payments benefits. According to the case, the court found that State Farm’s medical payments provisions in the plaintiff’s policy were “not illusory or ambiguous” and lined up with language in a Georgia state law. The plaintiff argues, however, that “the language of the statute does not render an otherwise ambiguous policy term unambiguous,” and filed a motion asking the court to reconsider its denial of class certification. By the time the plaintiff voluntarily dismissed the state action in February 2021, the court had not ruled on her motion to reconsider, the complaint says.

The plaintiff looks to represent the following proposed class:

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